Charge of clandestine removal must be supported by positive and tangible evidence.

PJ/Case law/2012-13-1547

Case:- COMMISSIONER OF CENTRAL EXCISE, DELHI-I VS ASHOK & CO. PAN BAHAR LTD.

Citation:- 2013 (290) E.L.T.319 (Tri.- Del.)

Issue:- Charge of clandestine removal must be supported by positive and tangible evidence.

Brief facts:-The officers visited and raided one godown located in Gazipur, Delhi on 27-8-2007 and recovered ‘Pan Bahar Pan Masala and Bahar Gutaka’ totally valued at Rs. 17,28,200/-. As nobody claimed the goods at the time of seizure, the goods were handed over to one Shri Bhram Dutt Tewari, a worker/labourer present at the site. In as much as the goods were manufactured by M/s. Ashok & Co., the statement of its Director, Shri Akhil Jain was recorded on 27-8-2007. He expressed his ignorance about the recovery of the goods and also deposed that the same might have been stored in the said godown by one of his purchasers. He also produced invoices issued by them during the month of August, 2007, their RG-1 register and PLA register showing clearances of all goods on payments of duty. On the above basis, proceedings were initiated against the respondents for confirmation of demand of Rs. 5,18,128/- as also for imposition of penalty. The Show Cause Notice (SCN) culminated into an order passed by original adjudicating authority confirming demand and imposing penalty. On appeal, Commissioner (Appeals) set aside the order of lower authorities. Hence the present appeal. It is also said that the entire case of Revenue is based upon the fact that Shri Jai Gopal, the buyer of the goods could not produce the invoices showing legal purchase of the same. Apart from above, there is no other evidence indicating clandestine clearance from the factory itself. In fact Shri Ashok Jain, Director of the manufacturing unit had very clearly deposed in his statement recorded during the investigation that all the goods stands cleared from their factory on payment of central excise duty and under the cover of proper invoices. He has also produced his record showing licit clearance of the goods.

Respondent' Contention:- The appellate authority has referred to the fact that the statement of Shri Akhil Jain are exculpatory statement and the statement of Shri Jai Gopal cannot be held to be inculpatory. In the absence of any evidence indicating clearance of the goods without payment of duty, confirmation of demand cannot be upheld and penalties cannot be imposed.

Reasoning of Judgment:-After hearing both the sides, Tribunal finds that it is well settled that the allegation of clandestine removal are required to be upheld on the basis of positive and tangible evidences and not on the basis of doubts. The demand has been raised on the allegation of clandestine removal of goods from godown and the goods were also seized. However, in statements taken, ownership of seized goods was denied by the manufacturer and ownership was admitted by the purchaser. Further records also show licit clearance of goods to the purchaser and under the cover of proper invoices. As such, Tribunal is of the view that impugned order of Commissioner (Appeals) has rightly followed the above principle and has rightly set aside the impugned order of original adjudicating authority. No merits are found in the Revenue’s appeal. The same is accordingly rejected.

Decision:- Appeal Rejected.

Comment:-The crux of this case is that the demand for clandestine removal cannot be confirmed without evidencing the same with positive and tangible evidences.

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PJ/Case law/2012-13-1547

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